MDHI received its first Costco drop ship order on June 28, 2012. The medipendant purchase through Costco includes shipping and 6 month's of monitoring that does not begin until the end user receives the unit. Therefore, even if they sold and shipped thousands of units between 6-28-12 and 6-31-12 there was very limited recurring revenue for Costco sales at any time during calendar 2012--and whatever they did get only came in during the last days of December of 2012. However, the revenue from the actual sales of the units that Costco sells began to show up as early as the end of fiscal 2012 which ended on June 31, 2012 and definitely by the beginning of Fiscal 2013 which began on July 1, 2012.
The quarter ending 9-30-12 included all the revenue for the units sold by Costco during that time but no recurring revenue. The quarter ending 12-31-12 included all the revenue for the units sold by Costco during that time but little to no recurring revenue.
The statement that revenue from Costco didn't begin to show until the quarter ending 12-31-12 is factually incorrect. The statement that Costco's recurring revenue began to show at any significant level in the quarter ending 12-31-12 is factually incorrect. The statement that Costco's recurring revenue was maximized in the quarter ending 12-31-12 is factually incorrect.
Finally, even adjusting to a 32 month average contract (I'd like to see verification of this number from a reliable source) without any growth from the repeated add campaigns and positive reviews of the medipendant, monthly revenue form Costco alone will be $88,000.00.
At 32 months, approximately 2600 units sold at Costco will have reached the point of paying the $30.00 per month monitoring fee which equals $78,000.00 in recurring revenue + $10,000 during that month for the new units sold by Costco.
To reiterate, that is $88k in monthly revenue from Costco sales alone and does not account for any increase in sales from Costco due to the aggressive marketing or positive reviews.
